Wall Street Analyst Downgrades Twitter In One Of The Shortest Downgrade Notes That You Will Ever Read (TWTR)

Friday

Dec 27, 2013 at 9:55 AM

Joe Weisenthal

Shares of Twitter are on a blazing rocketship path, and people are scratching their heads trying to figure out why.

The stock is up about 100% since late November, having closed yesterday at $73.31.

The surge has now gained mainstream attention — yesterday even Matt Drudge was tweeting about it, and about how he thought it was doomed.

Ben Schachter at Macquarie has now downgraded the stock, writing:

The Bottom Line – We expect this to be among the shortest downgrade note you’ve ever read, as nothing fundamentally has changed since our Neutral initiation on Dec. 11, except that shares have risen 40%. When we launched on TWTR 15 days ago, we laid out pros and cons and stated that TWTR was worth $46/share. Since that time, on the back of virtually no new news, the stock has risen in value 40% (vs. 2% for the S&P 500). Since the IPO open on 11/7, TWTR shares are up 62% (vs. a 4% gain for the S&P 500). We continue to believe that Twitter as a company has a bright future and many opportunities ahead. However, as a stock, we believe nothing has changed over the last 15 days to justify the rise in valuation. Therefore, we are reducing our rating to Underperform, from Neutral, and maintaining our estimates and $46 target price.

Macquarie expects that other analysts will also be downgrading the stock very shortly.

See Also:

The Trouble With 'Social ROI' —Companies Are Moving Away From Trying To Track Social Media's Dollar ValueFor No Apparent Reason Twitter's Stock Has Gone BananasCheck Out Twitter's Growth Versus Facebook From The Time Both Had 30 Million Users